Haryana's town planning department and HUDA under CCI probe

Fair trade regulator CCI on Friday ordered a probe against Haryana government's Department of Town and Country Planning and Haryana Urban Development Authority (HUDA) for alleged abuse of dominant position with respect to agreements with developers. Finding prima facie evidence of violation of Section 4 of the Competition Act, the Competition Commission of India (CCI) has asked the Director General, its investigation arm, to carry out an investigation.Section 4 pertains to abuse of dominant market position. The order follows a complaint by National Capital Region (NCR) chapter of the Confederation of Real Estate Developers Association of India (CREDAI).It was alleged that the agreements executed by the Department of Town and Country Planning and HUDA (Opposite Parties) with the developers were one-sided. Another allegation was that by virtue of the terms and conditions in Sohna Letter of Intent (LOI), Sohna Agreement and Sohna Licence, the Department of Town and Country Planning had excluded itself from any obligations and liabilities, and compelled the developers to agree to the terms of these documents. For the case, the regulator considered 'the market for issue of licences and development of infrastructure for residential plotted/ group housing/ commercial colonies in the State of Haryana' as the relevant one. Noting that the Department of Town and Country Planning and HUDA "prima facie" appear to be in a dominant position in the relevant market, the regulator said that their conduct prima facie appears to be in contravention of the provisions of Section 4 the Competition Act. In a 19-page order, CCI said it is of the opinion that even though the terms of Sohna LOI, Sohna Agreement and Sohna Licence relating to external development charges (EDC) and infrastructure development charges (IDC) emanate largely from the statutory provisions of the relevant statutes, prima facie the terms of these documents appear to be one-sided and in favour of the Opposite Parties. "Further, the alleged conduct of the OPs (Opposite Parties) such as failure to adhere to its obligations under the Sohna Master Plan in a time-bound manner and imposing onerous obligations on the developers to pay EDC/ IDC, prima facie, appears to be abusive," the CCI said. "The Commission finds that the conduct of the OPs whereby they have not undertaken any external development works related to the Sohna project is ultimately affecting the end consumers i.e. the allottees/ home-buyers, as because of non-development by the OPs, the completion of the project is getting delayed and the same is rendered uninhabitable," it added.